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Law and Accounting Networks and Associations
Chapter 4 – Organizing a Traditional Law Firm Network
Traditional law firm networks were organized out of the self-interests of the organizers to acquire resources
and contacts.156 They were first established by firms and companies based upon their needs to serve clients or
be competitive.157 Ultimately all networks began with individuals who saw the benefits of the model and
pushed forward. These individuals saw a common need that was not being fulfilled by their existing
organizations. Alternatively, they were not able to participate in other organizations, so they sought to develop
new ones. Others did not see joining an existing organization as being interesting. The result is 44 accounting
networks and 170 legal and multidisciplinary professional services networks.
Organizing a successful network is a challenge. It is a complex mixture of professionals, self-interests, cultures,
competitive pressures, finances, and other considerations. Whether a network is actually successful will usually
not be determined until five to six years after the process of organizing a network has started.
This section will begin with an evaluation of the fundamentals of establishing a network. The second part will
review how accounting, legal, multidisciplinary, and specialty networks have been established.
Why Form a Network Rather Than a Hierarchical Corporation?
Networks are formed in response to perceived needs of those organizing them. There are three types of primary
categories: first mover networks, second mover networks, and followers (i.e., we did not take the opportunity
to join a network, so now we have to create our own).
The first mover networks are established when a specific need cannot be fulfilled by an existing network and
generally can be traced to one individual. For example, Meritas158 was started by Leon Steinberg, who saw the
need for mid-size firms to have a network. In accounting, the first movers were the Big 4. In the legal
profession, the first movers were the Club de Abogados,159 Interlaw,160 and ALFA International.161
The first mover has certain advantages; it also has disadvantages that make organizing the network more
difficult. The advantage is one of green fields, as first movers can select whomever they like. Other advantages
include that the expectations of members are lower; they can be more innovative because the concept is new.
There are disadvantages, one of them being that there are no models from which to draw examples. It may be
difficult to describe the network and how it operates. First movers may not see all of the parts of the
association’s potential. They can be locked into a format that does not reflect the full effectiveness of the
system. The first mover may adopt a form of corporate governance that does not permit succession.
156 REDEJUR, www.redejur.com.br/en/historia.php; see this for a description of the process of organizing a network).
157 Network organizations can evolve out of personal or small group ties: “Many of the arrangements ... commonly found in the publishing, fashion,
computer software, construction, and entertainment businesses, are among individuals, independent production teams, or very small business units.”
Citing Powell, supra note 35; see also Walter W. Powell, Neither Market Nor Hierarchy: Network Forms of Organizations, 12 RES. IN ORG. BEHAVIOR
295, 293-330 (1990).
158 See MERITAS, www.meritas.org; see also James Swift, Well Connected – Network and Associations, THE LAWYER (Sept. 13, 2010), at 25.
159 See CLUB DE ABOGADOS, www.clubdeabogadosibero.com.
160 See INTERLAW, www.interlaw.org.
161 ALFA INTERNATIONAL, supra note 131.
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Chapter 4 – Organizing a Traditional Law Firm Network
Traditional law firm networks were organized out of the self-interests of the organizers to acquire resources
and contacts.156 They were first established by firms and companies based upon their needs to serve clients or
be competitive.157 Ultimately all networks began with individuals who saw the benefits of the model and
pushed forward. These individuals saw a common need that was not being fulfilled by their existing
organizations. Alternatively, they were not able to participate in other organizations, so they sought to develop
new ones. Others did not see joining an existing organization as being interesting. The result is 44 accounting
networks and 170 legal and multidisciplinary professional services networks.
Organizing a successful network is a challenge. It is a complex mixture of professionals, self-interests, cultures,
competitive pressures, finances, and other considerations. Whether a network is actually successful will usually
not be determined until five to six years after the process of organizing a network has started.
This section will begin with an evaluation of the fundamentals of establishing a network. The second part will
review how accounting, legal, multidisciplinary, and specialty networks have been established.
Why Form a Network Rather Than a Hierarchical Corporation?
Networks are formed in response to perceived needs of those organizing them. There are three types of primary
categories: first mover networks, second mover networks, and followers (i.e., we did not take the opportunity
to join a network, so now we have to create our own).
The first mover networks are established when a specific need cannot be fulfilled by an existing network and
generally can be traced to one individual. For example, Meritas158 was started by Leon Steinberg, who saw the
need for mid-size firms to have a network. In accounting, the first movers were the Big 4. In the legal
profession, the first movers were the Club de Abogados,159 Interlaw,160 and ALFA International.161
The first mover has certain advantages; it also has disadvantages that make organizing the network more
difficult. The advantage is one of green fields, as first movers can select whomever they like. Other advantages
include that the expectations of members are lower; they can be more innovative because the concept is new.
There are disadvantages, one of them being that there are no models from which to draw examples. It may be
difficult to describe the network and how it operates. First movers may not see all of the parts of the
association’s potential. They can be locked into a format that does not reflect the full effectiveness of the
system. The first mover may adopt a form of corporate governance that does not permit succession.
156 REDEJUR, www.redejur.com.br/en/historia.php; see this for a description of the process of organizing a network).
157 Network organizations can evolve out of personal or small group ties: “Many of the arrangements ... commonly found in the publishing, fashion,
computer software, construction, and entertainment businesses, are among individuals, independent production teams, or very small business units.”
Citing Powell, supra note 35; see also Walter W. Powell, Neither Market Nor Hierarchy: Network Forms of Organizations, 12 RES. IN ORG. BEHAVIOR
295, 293-330 (1990).
158 See MERITAS, www.meritas.org; see also James Swift, Well Connected – Network and Associations, THE LAWYER (Sept. 13, 2010), at 25.
159 See CLUB DE ABOGADOS, www.clubdeabogadosibero.com.
160 See INTERLAW, www.interlaw.org.
161 ALFA INTERNATIONAL, supra note 131.
23
